I'm trying to encode Canon 7D files into h.264 using Vimeo recommended (max bit rate @ 12) settings and I see the following hardware characteristics:

- CPU is 95-100% maxed out at all times
- RAM is hugely under-utilised at only 5GB of 16GB being used.
- SSD drive is nowhere near maxed out

I was pretty surprised that so little RAM was being used and that the CPU was such a limiting factor and I therefore want to better understand why the CPU is the bottleneck and how the encoding uses each of the main hardware components so that I can better comprehend the relationship between encoding and hardware.

Could anyone recommend some basic resources I should start out with or useful sites with this kind of content?

Here's a simplified breakdown. If you're decoding/encoding compressed formats (like h264, mpeg2) it will need CPU power because pretty much all your computer is either reading the data from small file to show it to you or making a bigger file smaller. SSD or a RAID won't help that much unless your CPU's can output that stuff really, really fast. If you're dealing with lossless formats (DPX, TIFF etc) then a fast hard drive will help because there's less computing and straight up more writing going on. Especially when you are reading lossless stuff a fast hard drive is essential.